Netflix Uses Piracy Data for Market Research

Last week Netflix launched in the Netherlands, making it the 41st country the video service has officially conquered. While this may be good news for Dutch binge-watchers and home bodies, it’s great news for anti-piracy advocates.

According to Forbes, when Netflix lands in a new country, the piracy rates plummet dramatically. Norway saw the number of illegal movie downloads drop from 125 million to 65 million and the number of illegal TV downloads drop from 135 million to 55 million between 2008 and 2012.

NetflixlogoNetflix could smile and accept credit for lowering global piracy rates as it moves from country to country – all while raking in a cool profit – but Kelly Merryman, Vice President of Content Acquisition, is taking it a step further. The decrease in illegal downloads isn’t just a positive side effect to the growth of Netflix, it’s the product of hard work enacted by the company.

When Netflix considers which TV shows it should add, it looks at the shows that are pirated the most often. The content that people are actively pursuing is the content that people will want to watch on Netflix. In other words, why would Netflix add and promote a show that very few people on the Internet were interested in watching? Following piracy trends gives Netflix the market research it needs to decide how popular a show will be once it’s in their system.

Netflix gives viewers a better product that’s easier to access than downloading pirated content. In this case, websites that specialize in illegal downloads are considered competitors to Netflix just as much as Hulu or Amazon. Time spent watching movies on those sites means time not spent on Netflix.

Let’s not glamorize Netflix’s choices as a war against piracy, it’s merely stomping out the competition and hedging its bets with market research. Thanks to the Internet, there are infinite ways for viewers to find any show they’re interested in. If shows and movies can’t be found on Netflix, Hulu, or network websites (NBC, ABC, etc.) then viewers will still find a way to see it.

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This is why networks that have registration pages on their websites and insist that visitors log in through their cable network to watch any shows are hurting themselves. People won’t feel confounded by barriers to entry, they’ll simply seek out other means to catch up on the latest episode.

The idea that life will find a way applies to more than video streaming and Jurassic Park, it also applies to content on your website. Shawna Wright explained why setting up gated content may hurt more than help:

Readers are becoming more protective of their email addresses. With so many free blogs, PDFs to download, videos, articles, etc. out there to be had there isn’t as much of a need to “pay” for gated content

If readers don’t want to sign-up to access your study, they can read the synopsis of it on another blog or find a similar study conducted by your competition.

So what do Netflix customers and your blog readers have in common? They’ll both take the path of least resistance to get to the content. Are you helping them or hurting yourself?

About the author

Amanda Dodge